In an opinion issued Jan. 19, the Illinois Supreme Court concluded that agreements between temporary staffing agencies that limit employees’ wages or employment opportunities can constitute violations of the Illinois Antitrust Act.

In State ex rel. Raoul v. Elite Staffing Inc., the state of Illinois sued three staffing agencies and their common client alleging that they violated the state’s antitrust statute by entering into agreements to fix the wages of certain employees and not to hire each other’s employees, all of whom worked at the common client’s manufacturing facility. The defendants moved to dismiss the complaint for failure to state a cause of action because the Illinois Antitrust Act bars anticompetitive agreements related to “services,” but the statute’s definition of services states that services “shall not be deemed to include labor which is performed by natural persons as employees of others.” Drawing on several federal cases interpreting this language to provide an exemption broader than the exemption of organized labor activities under federal antitrust law, the defendants argued that the definition of “service” exempted the conduct alleged in the complaint from liability under the statute. The trial court denied the defendants’ motion to dismiss, but certified for interlocutory appeal a question regarding the meaning and impact of the statute’s “services” definition.

The Illinois Supreme Court acknowledged that the “services” definition, on its face, “appears to exempt from antitrust scrutiny all agreements concerning wages and conditions of employment, regardless of their anticompetitive effects.” The court, however, found that such a construction would conflict with the purpose of the Illinois Antitrust Act to prohibit anticompetitive restraints on trade. When considered in the context of the entire statutory scheme, the court found that the language in question is ambiguous. To resolve this ambiguity, the court turned to federal antitrust law and secondary sources written contemporaneously to the enactment of the Illinois Antitrust Act and concluded that the Illinois legislature did not intend to exempt all agreements concerning wages and conditions of labor from scrutiny under Illinois antitrust law. In particular, the court concluded that “multiemployer agreements concerning wages they will pay their employees and whether they will hire each other’s employees may violate the Illinois Antitrust Act unless the agreement arises as part of the bargaining process and the affected employees, through their collective bargaining representatives, have sought to bargain with the multiemployer unit.” This interpretation appears to bring the scope of the Illinois Antitrust Act in line with the exemption for organized labor activities under federal antitrust statutes. The Illinois Supreme Court remanded the case to the trial court for further proceedings.

ASA partnered with the Staffing Services Association of Illinois to file an amicus brief in support of the defendants’ position.

To read the case, see State ex rel. Raoul v. Elite Staffing Inc. (2024 IL 128763).